Masayoshi Son had one message for investors as he tried to persuade them that buying one of the world’s most successful semiconductor companies in 2016 was a good idea: “For the era of the Internet of Things,’ I think the champion will be Arm.” However, the concept of connecting billions of everyday and industrial objects to the internet has progressed considerably more slowly than expected. The first gamble Son made on Arm that did not pay off was to grab the chip design market for the Internet of Things (IoT).
The second was the company’s $66 billion deal to Nvidia, which fell through last week. Arm continues to be the leading chip designer for smartphones, which are still the most popular form of computing but have had considerably slower growth in recent years. The company is racing to secure its position in new regions that it has underexploited to date, while also aiming to drive up profitability to appeal to a new set of investors, ahead of an initial public offering that may happen as soon as this year.
He then proceeded to nudge the executive team to focus on chip design for the future of machine connectivity. After five and a half years, it’s becoming increasingly evident that the Internet of Things wager was an expensive blunder. Furthermore, it diverted Arm’s attention away from Intel’s hegemony in the much larger data centre sector.